Japan’s Aozora Bank see gains on plans to resume dividend

Japan’s Aozora Bank Ltd. Shares saw gains as the Japanese lender announced its intentions to start paying dividends again while investor worries about losses on US commercial real estate subsided, Bloomberg reported.

The stock climbed by 9.6 per cent, the highest since March 2020, bringing its weekly gains to roughly 18 per cent. According to a spokesperson on Wednesday, the Tokyo-based bank updated analysts on its business status during a web meeting on Friday.

According to presentation materials from Aozora Bank, the lender, there are no further losses associated with US non-recourse office loans because the bank is properly managing its portfolio. The company stated that it intends to raise its annual dividend per share beginning in April of the following fiscal year. This month, Aozora Bank canceled its dividend and forecast a loss, which led to a 33 per cent decline in value that same week.

Moreover, the bank further stated in the presentation that the company’s customer-related business is growing and that it had approximately ¥1.4 trillion ($9.3 billion) in liquidity as of the end of December.

“We do not think the bank is at a point where it can lift profit expectations right away, but we see this as acknowledgment of the importance of maintaining a dialog with the market,” Morgan Stanley analyst Mia Nagasaka wrote in a report Friday.

Aozora Bank, which had been lending heavily in the US, announced on February 1 that it would experience its first loss in 15 years as a result of subpar loans linked to US real estate, raising concerns about exposure for other financial institutions.